Royal Clothes has performed admirably for the financial year 2014.It decides to reward its employees with a bonus of 15% on annual net income,after deducting the bonus.The net income before allowing bonuses is $300,000.Calculate the bonus allowable to employees.

Question

Quizplus · Accepted Answer

To calculate the bonus allowable to employees, we need to first deduct the bonus amount from the net income and then calculate 15% of the remaining amount.

The bonus amount would be:
Bonus = 15% of ($300,000) = $45,000

Therefore, the net income after deducting the bonus amount would be:
$300,000 - $45,000 = $255,000

Now we can calculate the bonus allowable to employees as 15% of $255,000:
Bonus allowable = 15% of ($255,000) = $39,130

So, the correct answer is B.

Royal Clothes Has Performed Admirably for the Financial Year 2014